INDIANA TAX COURT
TOWN OF ST. JOHN, et al., )
v. ) Cause No. 49T10-9309-TA-70
DEPARTMENT OF LOCAL )
See footnote )
ORDER AND JUDGMENT ENTRY
NOT FOR PUBLICATION
April 8, 2002
The Respondent, the Department of Local Government Finance (DLGF) in this case requests
that: 1) the Court order the Lake County Assessor to request appropriation
of funds to pay bills for services rendered by Arthur Andersen LLP for
its work on the Lake County reassessment or, in the alternative, 2) the
Court order the Lake County Auditor to pay the bills at issue.
In addition, the DLGF asks that the Lake County Auditor, Assessor, Commissioners, and
Council be joined as parties in this case. The DLGF makes these
requests so that it may meet the Indiana Tax Courts deadline for statewide
FACTS AND PROCEDURAL HISTORY
The present litigation is yet another chapter in the nearly nine-year legal battle
challenging Indianas property tax system.
The current controversy involves this Courts May
31, 2000, order that all real property in Indiana be assessed using constitutional
regulations as of March 1, 2002. Town of St. John v. State
Bd. of Tax Commrs, 729 N.E.2d 242, 246 (Ind. Tax Ct. 2000) (St.
John VI). In order to comply with this order, on November 27,
2001, the State Board of Tax Commissioners (State Board) contracted with Arthur Andersen
LLP to perform the reassessment of Lake County. The DLGF received an
invoice for services from Arthur Andersen LLP that was dated January 7, 2002.
On January 8, 2002, Jon Laramore, the Commissioner of the DLGF, sent
the invoice, an accounts payable voucher, and a letter to the Lake County
Auditor requesting that the County pay for services rendered by Arthur Andersen LLP.
In addition, Mr. Laramore sent a letter to the Lake County Auditor
and Assessor requesting that, if necessary, an appropriation be made. Thereafter, the
Lake County Assessor requested the appropriation. On February 7, 2002, the Lake
County Assessor asked that the Lake County Council remove the appropriation request from
the meeting agenda. To date, Lake County has not paid Arthur Andersen
On February 8, 2002, the DLGF filed a motion to join the Lake
County Auditor, Lake County Assessor, Lake County Commissioners, and the Lake County Council
in this case. On February 22, 2002, the DLGF filed a motion
for prompt hearing and for an order regarding the Lake County reassessment.
A hearing was held in this matter on March 4, 2002. Additional
facts will be supplied as needed.
ANALYSIS, OPINION & ORDER
I. Payment of Bills for Reassessment
In order to comply with the Courts deadline for statewide general reassessment, the
DLGF argues that this Court should either order the Lake County Assessor to
request appropriation of funds to pay bills due for services rendered for the
reassessment of Lake County or, in the alternative, order the Lake County Auditor
to pay the bills at issue. As discussed below, due to new
legislation signed into law by the Governor on March 27 and 28, 2002,
the Court need not grant the DLGFs request. See H.E.A. 1088, §
2, 112th Gen. Assem., Second Reg. Sess. (Ind. 2002) (amending Ind. Code §
6-1.1-4-32); H.E.A. 1196, § 8, 112th Gen. Assem., Second Reg. Sess. (Ind. 2002)
(amending Ind. Code § 6-1.1-4-32).
Specifically, under the new legislation that amends Indiana Code Section 6-1.1-4-32, the DLGF
is required to select and contract with a certified public accounting firm with
expertise in the appraisal of real property to appraise property for the general
reassessment of real property in a qualifying county
See footnote to be completed for the
March 1, 2002, assessment date.
Ind. Code § 6-1.1-4-32(e)). The township
assessor in a qualifying county may not appraise or have property appraised in
that county for the March 1, 2002 general reassessment. Ind. Code §
6-1.1-4-32(d). The only duty of the township or county assessors is to
provide information or support to the DLGF or the contractor that it selects
for the general reassessment. Id. The qualifying county is required to
pay the cost of the contract without appropriation from the county property reassessment
fund. Ind. Code § 6-1.1-4-32(i).
Once the contractor has gone through an approval and certification process, it may
submit a bill to the auditor of the qualifying county for payment.
Id. The approval and certification conclusively resolves the merits of the claim.
Id. The auditor submits the contractors claim to the county executive
who shall allow the claim, in full, as approved by the [DLGF] without
further examination of the merits of the claim. Id. Once the
claim is allowed by the county executive, the county auditor shall immediately issue
a warrant or check for the full amount of the claim approved by
the [DLGF]. Id. The determination and payment of a claim that
complies with the above stated procedures is not subject to remonstrance and appeal.
If the county auditor fails to issue a warrant or check to the
contractor at the first opportunity that the auditor is legally permitted to do
so, the contractor may notify the DLGF. Ind. Code § 6-1.1-4-32(u)(1)(D).
The DLGF shall then provide the State Treasurer with the DLGFs approval of
the bill. Ind. Code § 6-1.1-4-32(v)(2). Thereafter, the State Treasurer shall
pay the contractor the amount of the bill approved by the [DLGF] from
money in the possession of the state that would otherwise be available for
distribution to the qualifying county. Ind. Code § 6-1.1-4-32(w). The State
Treasurer will then withhold from the part attributable to the county of the
next distribution to the county treasurer . . . the amount of any
payment made by the treasurer of state to the contractor. Ind. Code
Here, the DLGF selected and contracted with Arthur Andersen LLP to perform the
Lake County general reassessment. The Commissioner of the DLGF has sent written
requests to both the Lake County Auditor and Assessor requesting that they pay
the invoices from Arthur Andersen LLP for services rendered. (States Ex. E,
F, G.) To date, these bills have not been paid.
See footnote Regardless
of any resistance from Lake County, it is clear that the new legislation
provides the DLGF with the means to pay Arthur Andersen LLP for its
services and to continue its work in order to complete the Lake County
See I.C. § 6-1.1-4-32. If Lake County continues to refuse
to pay the Arthur Andersen LLP bill, the DLGF can have the bill
paid by the State Treasurer. See Ind. Code § 6-1.1-4-32(w). Consequently,
the Court need not grant the DLGFs motion to order appropriation by the
Lake County Assessor or payment by the Lake County Auditor.
The Court recognizes that the future of Arthur Andersen LLP is unknown at
this time. Nonetheless, the Court reminds the DLGF of the Courts May
31, 2000, Order that real property in Indiana must be reassessed using constitutional
regulations as of March 1, 2002. St. John VI, 729 N.E.2d at
246. The Court unequivocally stated that [t]his deadline is firm. It
is not a mere goal . . . to be accomplished in the
future." Id. The Court also clearly required that local assessing officials
do their part in complying with the order. The Court stated that
it was confident that . . . with a determination by assessing
officials to do the job required--these officials will be able and ready to
do their jobs in a timely manner with accuracy, care, precision and pride.
Id. at 247. The Courts order is unambiguous. Therefore, despite
the uncertainty about the future of Arthur Andersen LLP, the DLGF must decide
how it will accomplish the Lake County reassessment in accordance with this Courts
May 31, 2000, Order. This Court DENIES the DLGFs motion to order
appropriation by the Lake County Assessor or payment by the Lake County Auditor.
II. Joinder of Parties
The DLGF also argues that Peter Benjamin, the Lake County Auditor; Paul Karras,
the Lake County Assessor; Rudolph Clay, Gerry Scheub, and Frances DuPey, the Lake
County Commissioners; Bernadette Costa, Troy Montgomery, William A. Smith, Tom ODonnell, Joel G.
See footnote Don Potrebic, and Larry Blanchard, the Lake County Council (collectively referred to
as Lake County Officials) should be joined as parties in this case.See footnote
The DLGF posits that these Lake County Officials should be joined because they
have threatened litigationSee footnote that could potentially result in the DLGF being placed under
conflicting legal obligations. More specifically, the DLGF asserts that any litigation, which
might be brought in a different forum, could result in a judgment that
conflicts with the DLGFs obligation to complete the reassessment for the March 1,
The DLGF served summonses on the Lake County Officials in conjunction with filing
its motion to join them as parties.See footnote None of the Lake County
Officials has filed any response to the DLGFs motion to join or summonses.See footnote
The Court hereby ORDERS the Lake County Officials joined as parties.
For the foregoing reasons, the Court DENIES the DLGFs Motion for Order Regarding
Lake County Assessment and GRANTS the DLGFs Motion to Join Parties.
Thomas G. Fisher, Judge
Indiana Tax Court
Thomas M. Atherton
KATZ & KORIN, P.C.
10 West Market Street
Indianapolis, IN 46204
Kenneth J. Falk
Indiana Civil Liberties Union
1031 E. Washington St.
Indianapolis, IN 46202
Richard A. Waples
Attorney at Law
410 North Audubon Road
Indianapolis, IN 46219
James K. Gilday
WOOD TUOHY GLEASON MERCER
3400 Bank One Center Tower
Indianapolis, IN 46204-5134
Attorney General of Indiana
By: Ted J. Holaday
Terry G. Duga
Deputy Attorneys General
Indiana Government Center South, Fifth Floor
402 West Washington Street
Indianapolis, IN 46204-2770
Robert W. Smith
Paula E. Neff
Fred M. Cuppy
Merrillville, IN 46410
Representing Lake County Auditor:
John Robert Cantrell
2149 U.S. Hwy. 41
Schererville, IN 46375
Representing Lake County Board of Commissioners:
John S. Dull
2293 N. Main St.
Crown Point, IN 46307
Representing Lake County Council:
Gerald M. Bishop
2115 West Lincoln Highway
Merrillville, IN 46410
The State Board of Tax Commissioners (State Board) was originally the
Respondent in this appeal. However, the legislature abolished the State Board as
of December 31, 2001. P.L. 198-2001, § 119(b)(2). Effective January 1,
2002, the legislature created the Department of Local Government Finance (DLGF),
§ 6-1.1-30-1.1 (West Supp. 2001)(eff. 1-1-02); P.L. 198-2001, § 66, and the Indiana
Board of Tax Review (Indiana Board). Ind. Code § 6-1.5-1-3 (West Supp.
2001)(eff. 1-1-02); P.L. 198-2001, § 95. Pursuant to Indiana Code Section 6-1.5-5-8,
the DLGF is substituted for the State Board in appeals from final determinations
of the State Board that were issued before January 1, 2002. Ind.
Code § 6-1.5-5-8 (West Supp. 2001)(eff. 1-1-02); P.L. 198-2001, § 95. Moreover,
the law in effect prior to January 1, 2002 applies to these appeals.
Ind. Code § 6-1.5-5-8 (West Supp. 2001)(eff. 1-1-02); P.L. 198-2001, §§ 95,
117. Although the DLGF has been substituted as the Respondent, this Court
will still reference the State Board throughout this opinion.
This battle has
resulted in a multitude of published opinions including:
Bielski v. Zorn, 627 N.E.2d 880 (Ind. Tax Ct. 1994); Town of
St. John v. State Bd of Tax Commrs, 665 N.E.2d 965 (Ind. Tax
Ct. 1996) (St. John I); Boehm v. Town of St. John, 675 N.E.2d
318 (Ind. 1996) (St. John II); Town of St. John v. State Bd.
of Tax Commrs, 690 N.E.2d 370 (Ind. Tax Ct. 1997) (St. John III);
Town of St. John v. State Bd. of Tax Commrs, 691 N.E.2d 1387
(Ind. Tax Ct. 1998) (St. John IV); Town of St. John v. State
Bd. of Tax Commrs, 698 N.E.2d 399 (Ind. Tax Ct. 1998) (order of
clarification of St. John IV); Town of St. John v. State Bd. of
Tax Commrs, 695 N.E.2d 123 (Ind. 1998) (Supreme Courts grant of review of
St. John III & IV); State Board of Tax Commrs v. Town of
St. John, 702 N.E.2d 1034 (Ind. 1998) (St. John V); Town of St.
John v. State Bd. of Tax Commrs, 729 N.E.2d 242 (Ind. Tax Ct.
2000) (St. John VI); Town of St. John v. State Bd. of Tax
Commrs, 730 N.E.2d 240 (Ind. Tax Ct. 2000) (St. John VII); State Bd.
of Tax Commrs v. Town of St. John, 751 N.E.2d 657 (Ind. 2001)
(St. John VIII).
A qualifying county is defined as a county having a population
of more than four hundred thousand (400,000) but less than seven hundred thousand
Ind. Code § 6-1.1-4-32(c). Lake County does not appear to
challenge that it is a qualifying county. Nonetheless, the 1990 census indicates
that there were 475,594 people in Lake County. (States Ex. J.)
The County Auditor and Assessor have not provided this Court with
any reason for their refusal to pay the bills for services already rendered
by Arthur Andersen LLP.
Footnote: In the Courts February 18, 2002, Order, Joel G. Markovich was
substituted for John C. Aguilera pursuant to the DLGFs Motion to Substitute Party
for the purposes of its Motion to Join.
Footnote: The DLGF asserts that the Lake County Auditor and Assessor should
be joined because their refusal to pay the Arthur Andersen LLP bill places
the Courts deadline to assess all property in Indiana as of March 1,
2002 in jeopardy. (Respt Motion to Join at 5.) The DLGF
contends that the Lake County Council and Commissioners should be joined because they
are essential participants in the payment process. (Respt Motion to Join at
5.) The Court no longer need address these arguments as the DLGF
now has the power to pay Arthur Andersen LLP or another contractor via
the State Treasurer pursuant to Indiana Code Section 6-1.1-4-32.
See Part I
infra of this Order.
The DLGF asserts that the Lake County Officials have threatened litigation
if the DLGF has the State Treasurer pay Arthur Anderson LLP and then
withhold the amount paid from money that would otherwise be available for distribution
to the county treasurer. DLGF Monthly Report 22 at 2.
also Ind. Code §§ 6-1.1-4-32(w) & (x).
The Court notes that pursuant to Indiana Trial Rule 4(A) [t]he
court acquires jurisdiction over a party or person who under these rules commences
or joins in the action,
is served with summons or enters an appearance,
or who is subjected to the power of the count under any other
law. Ind. Trial Rule 4(A) (emphasis added).
The Lake County Officials also have not responded to the DLGFs
Motion for Order Regarding Lake County Assessment.